No-deal scenario directly threatens future in the
UK, says
Airbus COO Tony Williams
Airbus has confirmed it is considering cutting thousands of
jobs in the UK as it starts to “press the button on crisis actions” over concerns about
Brexit.
The company said it could ditch plans to build aircraft wings in British factories over concerns that EU regulations will no longer apply from March 2019 and uncertainty over customs procedures, instead opting to transfer production to North America, China or elsewhere in the EU.
Airbus, which directly employs 14,000 people at 25 sites in Britain and supports more than 100,000 jobs in the wider supply chain, also said a no-deal scenario would lead to “catastrophic” consequences , which could cost the company billions of pounds in delays. The firm also said it was considering stockpiling billions of pounds of parts to prepare for Brexit disruption.
On BBC Radio 4’s Today programme, Tom Williams, the chief operating officer of Airbus Commercial Aircraft, was asked if the company was planning to abandon its plans to build new wings in the UK. He replied: “We are seriously considering whether we should continue that development or we should find alternate solutions.”
Asked how many jobs were at risk, Williams pointed out that Airbus generates 100,000 jobs in the UK, including 14,000 directly employed by the company.
Williams repeatedly called on the government to provide more detail about trading arrangements under Brexit and said the lack clarity was forcing its hand.
He said: “Over the next weeks we need to get clarify. We are already beginning to press the button on our crisis actions ... We have got to be able to protect our employees, our customers and our shareholders and we can’t do that in the current situation.”
Asked if he was under political pressure from European governments that part-fund Airbus to sound the alarm, Williams said: “I’m an engineer not a politician I have to deal in certainty. And we need to have clarity. We can’t continue with the current vacuum in terms of clarity.”
Earlier, Williams said: “While Airbus understands that the political process must go on, as a responsible business we require immediate details on the pragmatic steps that should be taken to operate competitively.
“Without these, Airbus believes that the impacts on our UK operations could be significant. We have sought to highlight our concerns over the past 12 months, without success. Far from ”project fear”, this is a dawning reality for Airbus. Put simply, a no-deal scenario directly threatens Airbus’s future in the UK.”
In a risk assessment of the Brexit process published on Thursday, Airbus, which generates £1.7bn in UK tax revenues [pdf], gave a damning analysis of Britain leaving the EU without a deal. It said leaving the single market, and the customs union and the European court of justice would heavily disrupt its supply chain.
The risk assessment said operating under WTO rules could cost the company billions of pounds every week in loss of turnover and delay penalties. In the event of a no deal, the aerospace firm said it would be forced to reconsider its footprint in the UK, putting thousands of high-skilled jobs at risk.
In what the company called an “orderly” Brexit scenario with an agreement and transition period, the aerospace giant warned the current transition endpoint of December 2020 did not give the business enough time to reconfigure its supply chain and was likely to cause production disruption.
Darren Jones, the Labour MP whose Bristol North West constituency contains the Airbus Filton wing factory, attacked the government after Airbus’s statement.
Jones said: “Time and time again the government has been shown to listen only to hardline pro-Brexit MPs and not to the businesses that employ thousands of British workers, including Airbus. “Thousands of skilled, well-paid jobs are now on the line because of the shambolic mess the government have created over the Brexit negotiations.”
Thursday’s statement is not the first time Airbus has demanded further clarity on the Brexit process. In March, Katherine Bennett, the senior vice-president for Airbus in the UK, told the Today programme that a three-hour wait on a lorry at Dover “would be a critically bad issue for Airbus”, as would be delaying cargo flights carrying completed wings to Europe.
Bennett said: “It’s critical for our business to ensure that the wings that we build in Broughton and in Filton can get to France and Germany for the final assembly line.”
Bennett said Airbus spent about £5bn each year on the UK supply chain. “It’s really important that the parts don’t get held up in warehouses. We have a very just-in-time delivery system.”
She welcomed Theresa May’s intention for Britain to remain a member of EASA, the European air safety certification agency, warning that customs remained “pretty critical for us” and said that Airbus very soon would “have to press a button on a decision on stockpiling parts”.
She added: “It would be very expensive for us and a burden we don’t want to be suffering. Our key preference is for the UK to remain a home nation for Airbus. But we really need the conditions for us to be effective. We don’t want extra costs on our UK business which may make Airbus think differently about us.”